Tuesday, December 20, 2011

National Food Security Bill & Socialism

An email that I received the other day reminded me of the labour crisis that my parents spoke of some months back.

The maid wouldn’t want to work at anything less than twice the amount we paid till last month. Labour supply for construction work is low and hence, an indirect rise in the demand of higher wages. Similar is the situation in Agriculture although, the effect might not have been that severe or even more in other places.

"Why not?" was the answer that I received when I asked, "Why is that so?" ....When you get to do less work for same amount of money under some scheme “MGNREGA” implemented by central government with guarantee of work for some x number of days then, why not?

These Schemes under “MGNREGA” were implemented by the government to resolve lower section unemployment in the society however, the implementation of the so called schemes have disrupted the labour market in a huge way.

Similarly another highly appreciated and lauded “National Food Security Bill” which is about to be launched by the central government under much fanfare may create a major and heavy disruption in the labour market. And the email(shown below) tries to explain how this can happen in a beautiful way.

"You must have all read this or would know of this but I still felt strongly and hence wanted to share……

Lesson in Socialism

An economics professor at a local University made a statement that he had never failed a single student before, but had recently failed an entire class. The class had insisted that socialism worked and that no one would be poor and no one would be rich, a great equalizer.

The professor then said, "OK, we will have an experiment in this class on the socialism principles". All grades will be averaged and everyone will receive the same grade so no one will fail and no one will receive an A(substituting grades for Rupees - something closer to home and more readily understood by all).

After the first test, the grades were averaged and everyone got a B. The students who studied hard were upset and the students who studied little were HAPPY. As the second test rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

As the tests proceeded, the scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

To their great surprise, ALL FAILED and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great, but when government takes all the reward away, no one will try or want to succeed. Couldn’t be any simpler than that.

These are possibly the 3 best sentences you'll ever read and all applicable to this experiment:

1. What one person receives without working for, another person must work for without receiving.

2. The government cannot give to anybody anything that the government does not first take from somebody else.

3. When half of the people get the idea that they do not have to work because the other half is going to take care of them, and when the other half gets the idea that it does no good to work because somebody else is going to get what they work for, that is the beginning of the end of any nation."

So, the segment of population whom the government would supply the food at almost free/too low a cost tomorrow need not work the same amount of time they do today.

Let’s assume the market has 100 people working for 10hours today at a wage of 100 rupees a day. Hence, the amount of work in the market is 1000manhours a day or 30000manhours a month.

Once the “National Food Security bill” is implemented, some of them would be completely satisfied by working for 1hour a day instead of 10hours a day or by working for 1day instead of 10days. Since, this will give them 100rupees to take care of the basic requirements that they were earlier getting in 1000rupees. But, some would be ready/ambitious to work for 10hours a day everyday so that they can save the rest of money for some rainy day/betterment of lifestyle. However, the amount of work required in the market is still 30000manhours a month resulting in an indirect increase in demand of higher wages which have already gone higher due to the earlier schemes under “MGNREGA”.

No offense against reservations/Ambedkar. Dr.B.R.Ambedkar has brought in the reservations 60years back saying they will be removed in some 10years since, this period of 10years might have lead to upbringing of those backward sections in the society. But, everyone tried to play around and it has just become a political gimmick which may lead to a dangerous situation in the years to come. A day might be seen when who so ever is in the open category may ask for a reservation under a special status called “The Open category.”

Who guarantees that these MGNREGA and National Food security Bill will not be played with by future dynasties of politicians?

Open for Comments…